The human syndrome of resistance to thyroid hormone (RTH) is associated with dominant mutations in the thyroid hormone receptor β (TR β) gene that generate mutant receptors with impaired binding for T3. Although the TR β gene differentially expresses two N-terminal variant receptors, TR β 1 and TR β 2, functional analyses of RTH mutants have focused exclusively on TR β 1. Since TR β 2 is expressed in tissues that are malfunctional in RTH, the role of mutations in the context of TR β 2 was examined. We compared the functional properties of corresponding RTH mutations in the common C-terminal domain of both TR β 1 and TR β 2. Wild type TR β 1 and TR β 2 bound similarly as homodimers and as heterodimers with retinoid X receptors to T3-responsive elements consisting of a direct repeat with 4-base pair spacing or an everted repeat. Homodimers, but not monomers or heterodimers, of both receptor subtypes were dissociated by the addition of T3. However, TR β 2 formed at least 10-fold more stable homodimers than TR β 1 on a palindromic repeat element, indicating that the N termini of TR β 1 and TR β 2 differentially influence dimerization on DNA. The RTH-like mutants of both TR β 1 and TR β 2 were equally insensitive to T3. They were defective in T3 binding but still bound DNA like their wild type counterparts except that the T3-dependent dissociation of homodimers from DNA was severely reduced. Wild type TR β 1 and TR β 2 mediated T3-inducible transactivation in cotransfection assays; this, however, was abolished in both mutants. TR β 1 mediated more sensitive T3-dependent transcriptional suppression than TR β 2 through the negative T3 response region of the TSH β gene. Again, the mutation abolished T3-dependent suppression by both mutants. Furthermore, both mutants inhibited T3-inducible transcriptional activation by different wild type TR α and β variants. These results indicate that both mutants have the potential to contribute to the pathogenesis of RTH and suggest that a reassessment of previous models of RTH is required to take into account the inhibitory activity of both TR β 2 and TR β 1 mutants.